Where the world is heading, lower rates are needed now
Is this move to zero [percent yield] going to just be a churning inside a trading range?
My treasury zeros and bullion look awesome. The indexes are going nowhere.
That is great news for your holdings and I am glad you are long bonds. It seems that we have had good predictive accuracy over the past few years, because we were able to determine the direction of bond yields. It’s easy once one knows the agenda. We discuss it all the time, so this all comes as no surprise.
First, let’s preface this discussion, so the answer becomes obvious.
Virtually all of the alt-financial media have been wrong on the bond yield directions over the past few years, because they refuse to repent of their transgressions and admit that the owners of the central banks are in control. Their advice has been antithetical to the actual outcome.
Our large bets have been correct if for only one reason; we know that the global financial system desperately needs much lower rates now, and given that there will be no debt repudiations, and that the central banks are in control, the only conclusion is that lower rates will come.
My guess is that we will continue to see more of the same, as the bond yield curve continues its massive downward shift, while bonds move up in price. I doubt we will see more than a few months of churn and that the best credit nations that offer up the best yields (e.g. Australia, Canada, New Zealand, and the U.S.) will respond the best. We are already seeing this unfold as we predicted and Australia is the first to go sub-1%. New Zealand and Canada will follow, with the U.S. hitting that magic number soon.
Under the current global scenario, the global investor is being conditioned as we speak to accept the inevitable; a regime of negative rates throughout the developed world. It may be hell on earth for the average person, but for those positioned correctly (hopefully we will continue to profit here), the profits should continue to roll in. I say, let the scenario roll out as planned and our assets should rise over the intermediate term.
Keep in mind that the same owners of the central banks control the mainstream business media (and by the Delphi technique, the alt-financial narrative of economic collapse). This media manipulation has allowed the central banks to continue these unprecedented and remarkable monetary policies virtually uncontested. The mainstream media say that falling bond yields are from a saving glut and economic slowdown, while the alt-financial dummies continue to pound the table about economic collapse, which was caused by a failure of monetary policy. I see nothing stopping the timeline at this point. All have drunken the Kool-Aid and have been redirected into the wrong conclusions.
My conclusion; rates will fall harder than what most think and the globalist agenda will move forward. Why is this? Both, the mainstream and alt-financial media have been conditioning us to the inevitability of negative rates, while the world desperately needs much lower rates now.
From what I observe, Donald Trump has been very useful to the elites, as he is carefully carrying out his orders to create the manufactured chaos that will provide all the excuses to crash interest rates further.
But we know the dark reality. If the central banks stopped buying sovereign debt, cutting rates, and pumping up asset prices, the nation-states would all go insolvent. And that doesn’t seem to be on the elites’ docket.